QBCC minimum financial requirements

Four tests a contractor grade or builder grade licensee has to satisfy at all times, plus an annual report. Net tangible assets of at least the amount schedule 1 part 2 sets for the licensee's financial category, and, excluding any deed of covenant asset, of not less than $0 (MFR Regulation 2018, s 12(1), s 12(2)). A current ratio of at least 1, calculated as current assets over current liabilities and never rounded up (s 17G, s 17H). Actual revenue inside the maximum revenue QBCC has approved (s 11H, s 11J). And payment of debts to contracted parties and suppliers on or before the day they become due and payable (s 17N). On top of those, financial information has to be given to QBCC on or before the licensee's annual reporting day (s 9A). Figures from the reprint current as at 7 March 2025.

SC1 is a fixed $12,000 and SC2 a fixed $46,000 (MFR Regulation 2018, schedule 1 part 2 sections 12 and 13). Categories 1 to 7 are not bands at all, they are sliding formulas run on the licensee's maximum revenue, for example category 1 is mNTA = [((Max - 800,000) / 2.2M) x 110,000] + 46,000 at section 14. QBCC publishes the endpoints of those formulas as ranges, $46,001 to $156,000 for category 1 through to more than $14.4M for category 7 (QBCC, Net tangible assets, last updated 30 June 2024). The bands and the formulas agree at both ends of each range, but the formula is the legal test, so a licensee sitting between two endpoints gets the wrong answer from a band table.

QBCC publishes the window for categories 1 to 7 as lodge from 1 August, due by 31 December, so the window now open closes on 31 December 2026 (QBCC, Annual financial reporting, last updated 7 March 2025). The date that actually binds is the licensee's own annual reporting day, which QBCC states in a written notice when the licence is granted and may change on the licensee's application (MFR Regulation 2018, s 10(1), s 10(2)). The obligation at section 9A is to give QBCC the financial information for the most recent reporting year ending before that day, with a maximum penalty of 20 penalty units. For most licensees the reporting year is the year ended 30 June. QBCC states that it contacts licensees at least 40 days before the deadline and that the written notice confirms the due date.

Categories 1, 2 and 3 (MFR Regulation 2018, s 9(b)). Schedule 3 defines internal management accounts as a profit and loss statement, a balance sheet, an aged debtors and creditors report that includes the date each invoice is due to be paid or received, and a statement of cashflows, prepared under the prescribed accounting standards. Categories 4 to 7 give signed financial statements instead (s 9(c)), and SC1 and SC2 licensees other than an individual give a declaration in the approved form (s 9(a)). There is a divergence worth knowing about: QBCC's guides state that annual reporting information does not need to have any accounting standards applied and does not need to be prepared by an accountant (QBCC, Guide to Annual Financial Reporting, March 2025, page 12). The second half is consistent with the regulation, because the qualified accountant requirement in section 11A attaches to MFR reports only. The first half is not, because schedule 3 and section 8(2) both call for the prescribed accounting standards.

An individual contractor licensee in category SC1 or SC2, meaning an approved maximum revenue of $800,000 or less, does not lodge annual financial information (MFR Regulation 2018, s 9(a), s 10(3)). A builder contractor's licence must not be in category SC1 (s 11I), so for a sole trader builder the exemption runs to SC2 only. Every company licensee lodges whatever its category, and individual licensees in categories 1 to 7 lodge. Where a person holds both a company and an individual contractor licence, the individual licence needs annual reporting only if its approved maximum revenue is more than $800,000. This is an exemption from annual reporting and nothing else: the net tangible asset floors, the current ratio and the maximum revenue cap apply at all times, and internal management accounts still have to be prepared for each quarter of the reporting year under section 11E, with QBCC able to ask for a copy on 14 days notice.

A licence application with a proposed maximum revenue of more than $800,000 (MFR Regulation 2018, s 8B(1)(b)). An application at any time to change maximum revenue, for any category above SC2 (s 11M(2)), which is also how a category change happens, since category follows maximum revenue at section 11H. A fall in net tangible assets of more than 30% for SC1, SC2, 1, 2 and 3, or more than 20% for 4 to 7, below the figure QBCC last accepted in writing, reported within 30 days (s 13). A significant change to the business, as soon as practicable (s 11F). A written QBCC request to an SC1 or SC2 licensee, allowing at least 21 days (s 11G). And discovering that the most recent MFR report was incorrect in a material particular (s 11B). The report has to be signed by a qualified accountant no more than 30 days before it is given to QBCC, on information no more than 4 months old at the date of signing (s 11C).

The exposure is the licence, not the fine. Every contractor's licence carries a condition that the licensee's financial circumstances satisfy the minimum financial requirements at all times, and contravening a condition is a ground on which QBCC may suspend or cancel (QBCC Act 1991, s 35(5), s 48(1)(f)). Section 53A goes further: QBCC must not renew a licence where it has not been given the required information within the time allowed, which is mandatory rather than discretionary. QBCC's published approach, from its July 2022 regulatory guide and stated as its practice rather than a statutory sequence, is at least two email reminders, then a proposed condition preventing new work with 21 days to respond, then a show cause notice as to suspension with another 21 days, then suspension and usually cancellation. Conditions, suspensions and cancellations appear on the publicly available licence history. The statutory maximum for not giving the annual information is 20 penalty units, which at the general Queensland penalty unit value of $172.70 in force from 1 July 2026 is $3,454.

Part 2 exempts three groups, and each needs the licence class and the matching professional indemnity insurance and that the licensee works solely within that class's scope: the design only classes at section 5, builder project management services at section 6 where the insurance carries a limit of at least $1M for a claim, and a special purpose vehicle at section 7 but only to the extent it carries out building work under the public private partnership it was established for. All three carve out part 4B and section 17N, so an exempt licensee still holds professional indemnity insurance and still has to pay its debts when they fall due. Separately, QBCC states that nominee supervisors, site supervisors, occupational licensees, building certifiers and pool safety inspectors do not have to meet any MFR obligations (QBCC, Guide to Minimum Financial Requirements and Annual Reporting, Version 1, July 2024, page 3). That is not the same as being outside every QBCC financial power: sections 50A(3) and 50C(6) of the Act expressly include a pool safety inspector for the approved audit program and the supply of financial records.

No. Section 17H(2) of the MFR Regulation 2018 says the ratio must not be rounded up, and QBCC uses 0.9987 to 1 as its own worked example of a ratio that fails (QBCC, Current ratio requirements, last updated 18 October 2021). The ratio is current assets divided by current liabilities (s 17H(1)) and has to be at least 1 at all times (s 17G). QBCC adds two practice points on the same page: for licensees up to $800,000 revenue the ratio need only be demonstrated on request, above that an accepted independent accountant calculates it as part of the MFR report, and amounts assured by a deed of covenant and assurance are not included in the calculation.